Hospitality Report Africa 2017 copy(Abel's Draft)

Hospitality Report Africa 2017

The African factor

Population

1.2 Billion in 2016; estimated to grow to 2.5B in 2050. The average age is 19.5 years

Top Economy Growth

With 4.5 %, Africa is the world’s second fastest growing economy after East Asia.

Middle Class

1.1 B people in the middle class by 2050 (40%)

Tourism and GDP

Tourism accounted for 7.8% of African GDP (US $ 165 billion) in 2016

Tourism employment

1 out of 20 people indirectly work in the tourism sector

Number of Visitors

58 Millions arrivals in 2016 and this number is expected to grow to 110M by 2027

Internet Penetration

In 2016, the internet penetration rate was 27% with more than 300 million users.

Mobile Penetration

50% in 2016 with 557 million users. Smartphones represent 28% with a forecast of 68% in 2020.

Africa is the world's second-most-populous continent with approximately 1.2 Billion people (41% urban); expected to reach 2.5 bl by 2050 (25% of the world population).

1 out of 3 africans are part of the middle class, and are expected to double by 2050. The middle class are an important contributor to the growth of local and regional tourism.

The region is expected to attract 64 M international tourist arrivals in 2017, as compared to 58 M in 2016 (+ 8% vs 2015), and 110 M by 2027.

Africa accounts for only 3% of the world’s air traffic. ‘IATA’ predicts a stronger growth of 4.8% in passenger numbers in the next 5 years starting 2017, thanks to the increase of international flights into the continent.

131 sites are designated UNESCO World Heritage Sites in Africa, located in 37 countries. This accounts for 12 % compared to the rest of the world (1031 sites).

According to an African survey conducted in 2016, the major issues regarding traveling in the continent are : cost, visa restriction, travel booking and flight connection.

Among challenges facing African tourism is terrorism. A spate of terrorist attacks has plagued some countries since 2015, with adverse impacts on the performance of the tourism sector. Among affected countries are Kenya, Tunisia, Mali, Burkina Faso, Côte d’Ivoire, Egypt and Nigeria.

While Africa has seen great milestones in the development of Infrastructures, major challenges still abound in advancing transport systems (road, rail, and airports) as well as power/electricity supplies.

In 2016, the African Union launched a common visa policy including visa-on-arrival for all African citizens. This agenda also includes the goal of having a single African continental passport by 2020. Adoption of visa liberalization policies could increase Africa’s tourism by 5 to 25%.

Edmond Moukala

Director of African Department, UNESCO

"The State of African Heritage Sites"

What is the current situation of the African Sites listed by UNESCO?

Africa, the cradle of mankind, has incredible riches both culturally and naturally. 131 African sites are listed on the World Heritage List, of which 85 are cultural sites, 40 natural and 6 are Mixed. 53 of the 54 States of the African continent have ratified the 1972 Convention. Of these, 40 have successfully proposed the inclusion of their national sites in the World Heritage. However, the African continent remains under-represented on the World Heritage List (12%). The heritage list facing threats currently has 23 African properties, that is 42% of the total. Indeed, these sites face many challenges, such as armed conflicts, terrorism, poaching, and illicit trafficking, global warming and natural disasters, and uncontrolled urban expansion, unregulated tourism, and mineral and oil exploration.

The African World Heritage Fund, established in May 2006, provides financial and technical aid to African States for the safeguarding of their cultural and natural heritage. In order to promote African heritage, the General Conference of UNESCO proclaimed 5th of May as an African Heritage Day to raise awareness among local communities, especially young people, and to safeguard these valuable assets. Since the inception of the Fund and the establishment of the African Heritage Day, Africa has become conscious of sustainable development and the urgency of protecting the environment in the context of the 1972 Convention

How can the classification by Unesco contribute to the development of tourism in Africa?

African heritage is an opportunity for sustainable development and economic growth. Africa being one of UNESCO's priorities, this previous effort has been to put the power of culture into that of sustainable development and of peace in a context of regional integration. The inscription of sites on the World Heritage List remains an important asset for tourism and sustainable development. The World Heritage label is a valuable opportunity for the visibility of these sites which may experience a renewed curiosity and increased visitor attendance. The inscription on the World Heritage List is an additional opportunity for reinforcing international recognition which on raising awareness of the importance of protecting the sites. The nomination of a site results in an increased effort to develop the territory, to enhance and safeguard the property hence generating a stable and sustainable economic dynamic. In this International Year of Sustainable Tourism for Development, UNESCO is developing, with this in mind, a Program on World Heritage and Sustainable Tourism, based on the dialogue and cooperation between the various players in order to promote tourism that respects classified sites.

How can new technologies contribute to the protection of African sites classified by UNESCO?

The Ngorongoro Declaration calls upon "African State Parties to exploit the opportunities offered by the new and emerging technologies to ensure the conservation and sustainable development of the World Heritage properties". New technologies can contribute to heritage conservation as through them, the collection, dissemination, and analysis of important data for the sites is feasible. Drones are equally an innovative tool for ecological monitoring and follow-up of sites. Today, visitors, through their smartphones, have become actors of this protection, by alerting managers directly and immediately in case of incidents or damage. Resources acquired by crowdfunding can be very useful in financing the protection of sites. Technologies are also a Channel to increase visitor awareness, in particular regarding the protection of sites and their outstanding universal value. They are also an opportunity to facilitate access to isolated sites (By electronic means). New technologies are also useful for developing sustainable tourism which is respectful of the sites. Various projects based on new technologies have been developed for the protection of heritage. For example, a flagship project meant to integrate young people into the protection of Heritage through new technologies is the #Unite4Heritage campaign. Launched in 2015 by UNESCO to respond to the violent propaganda of extremists and the destruction of many sites in Mali, Libya, and more recently in Syria, this campaign is being followed today by 15 million people around the world. Its strong presence on social networks is in an effort to involve young people in UNESCO's actions. Another example is the Youth Heritage Experts initiative, which was established by following the Forum of Young Experts at Bonn in 2015. This platform for online reflection is an example of success and a source of inspiration for the broadcasting of UNESCO's values ​​and actions through the new communication and information technologies. These two tools are crucial for raising awareness about heritage protection. The technologies thus open up great opportunities for the development of tourism, its sustainable development and the protection of heritage sites.

Tewolde Gebremariam

CEO, Ethiopian Airlines

"In Africa, air transport is themost viable means of transport"

What is your insight about the African aviation industry and what are the key advancements and challenges of the industry in the continent?

It’s a very exciting time for African aviation industry. However, Africa is still contributing little to the global aviation industry with only 3% as compared to all global traffic. Nevertheless, the growth is very encouraging. With more investments coming to the continent from China and India which is expected to drive the continent’s development; air traffic in Africa is also expected to grow. In Africa air transport is the most viable means of transport as others are very under developed. Among the many challenges facing the aviation sector is that for the longest time, the industry lacked the necessary attention it deserves from African heads of states as it has always been considered a luxurious means of transport. Others include high taxation levied at times equal to cigarettes and alcoholic beverages, low connectivity within the continent, and expensive jet fuel with a cost 30% higher in Africa than the rest of the world; as well as infrastructure problems and expensive services. These results in high operation costs which are then transferred to the customers, making air transport unaffordable by many thus creating a vicious circle of challenges. However, despite these challenges, progress of the industry has to do with good safety records that has improved over the last few years. Today, many African airlines including Ethiopian airlines, South African Airways, Egypt Air, Kenya Airways, Air Morocco, Tunisiair, and TAAG Angola meet the global standards of safety records. Connectivity has also increased especially between African countries and the rest of the world.

What needs to be done to make easier, accessible and affordable transportation system within Africa and beyond?

Government’s attention to the aviation industry and infrastructural developments are the key solutions to make easier, accessible, and affordable transportation system within and outside of the continent.

How do you see the future of the hospitality industry in the coming ten years, and how can Africa attract more travelers from the continent and from the rest of the world?

Out of the total global tourists, only 55 million tourists visit Africa annually which is much less than the rest of the world (more than a billion tourists annually). However, progress has been noted on the continent with more African destinations becoming popular globally. The hotel industry infrastructure development has also grown tremendously, with more chain hotels (365 pipelines in 2016) coming to Africa and bringing encouraging results on the continental hospitality industry. The current initiatives to develop infrastructure are popularizing African destinations, and in a short period of time the continent will see a booming hospitality industry attracting travelers from across the world.

Africa Hospitality Outlook

Tourism’s contribution to Africa’s GDP was 7.8% (USD 165.6bn) in 2016, and is expected to rise to 7.9% of GDP to USD 170.5bn 2017. This contribution is predicted to grow by 4.6% pa to reach USD 268.2bn by 2027.

In 2016, domestic travel spending generated 63.7% of Africa’s Tourism GDP, and is expected to rise by 2.8% in 2017 to USD 73 bn, and then by 3.6% pa to USD 104 bn in 2027.

On the other hand, foreign visitor spending stood at 36.3% in 2016 (USD 40.7 bn), and is expected to grow by 5.3% in 2017 to USD 42.9bn, and then by 5.9% pa to USD 76.0bn in 2027.

The top 5 destinations for international arrivals in 2015 were Morocco (more than 10 million), Egypt (9.1 M), South Africa (8.9 M) , Tunisia (5.36 M) and Zimbabwe (2.06 M). Major Business Destinations included Johannesburg, Lagos, Nairobi, Abidjan, Accra, and Cairo.

Destinations with strongest growth in international arrivals in 2016 were Zimbabwe, Mauritius, Ghana, Sudan, and Seychelles

The leading source market for international arrivals in 2016 was Europe with 47.3%, while Asia Pacific was the fastest growing market with an increase of +21.7% (mostly from china.

In 2016, most of the top 10 African destinations saw positive year-end performance after rebounding from the effects of the Ebola outbreak. However, Nigeria and Ethiopia lacked international visitors with a decrease of 4 % and 0.8% respectively.

A total of 365 hotel chain development pipelines were reported in Africa in 2016, with 64,231 rooms. This is a 29% increase, from the 2015.

Nigeria and Angola have the highest number of hotel chains, with 61 and 56 hotels respectively; accounting for almost 30% of the total pipelines. There are 20% more signed rooms in 2016 than 2015.

In terms of cities, Lagos takes the lead by number of planned rooms with 4,000, while Nairobi takes the 4th position with 2,666 planned rooms in the African pipeline.

Marriott International, Best Western and Hilton continue their robust expansion across the African continent. Noticeably, the AccorHotels’ mega-deal in Angola propelled the company from 6th place in the 2015 rankings (as a company), to the 1st place in 2016.

Price per night per room

Average price per night per room

Destination Searches by Customers

Booking price evolution

E-Tourism

Top 8 African Internet Countries

Percent of Internet penetration in Africa

In 2016, the internet penetration rate was 27% with more than 300 million users.

Currently, there are approximately 345 million internet users in Africa, representing 9.3% of the total population and penetration rate of 27.7%.

Mobile technologies and services generated 6.7% of GDP in Africa in 2015 (around USD 150 billion of economic value), and is expected increase to more than USD 210 billion (7.6% of GDP) by 2020.

By end of 2015, 46% of the African population (more than half a billion people) subscribed to mobile services. The number is unique subscribers is estimated to reach 725 million by 2020. The mobile ecosystem supported 3.8 million jobs in 2015.

The 4G network has extended to more than half of the African countries, with 72 live LTE (Long-Term Evolution) networks in 32 countries by mid-2016. However, its adoption still lags behind the rest of the world with only 20% 4G population coverage.

Lack of digital skills remains a major barrier to mobile internet adoption especially in Sub-Saharan Africa. Supporting digital literacy by tourism stakeholders in the continent is therefore an essential element in promoting e-tourism in Africa.

In its aim to connect the whole world to the internet, Facebook launched its Free Basics initiative in 2016; connecting almost half the African countries to its free internet service.

African Union recently launched the africa domain name for the continent, a move that gives Africa its digital identity and aims to decrease the cost of acquiring a URL which then allows people and businesses to better reach the world.

Sources of traffic

Jumia Travel

How much in advance travelers search online?

Cumulative Percentage

Period

35 %

Same day

58 %

Less than 24 hours

67 %

Less than 48hours

85 %

Less than 7 days

92 %

Less than 2 weeks

97 %

Less than a month

3 %

More than a month

By Gender

Hotel search by amenities

Sources of traffic

Desktop

Smartphone

Booking

32%

68%

Searches

49%

51%

By Age

Customers' origin

Payment Options

Strengths

Diversity of landscapes and cultural richness: the continent is one of the most beautiful travel destinations in the world.

Tourism has the potential to be the leading contributor to the continent’s total GDP, boosting its economic growth

For more insights on the hospitality state of individual countries, read these reports:

Hospitality industry is a key contributor to Africa’s economy and infrastructure development. A growing middle class coupled with relaxed travel restrictions within Africa’s economic regions are the main drivers of the surge in domestic tourism. Additionally, there is a tremendous growth in hotel chains investing in the major business destinations such as Lagos, Nairobi, Abidjan, Accra and Johannesburg not to mention an increase in flight traffic to these cities by the major airlines. This hospitality report by Jumia Travel dwells on the key opportunities that Africa’s hospitality industry holds despite the challenges the continent faces.